Gross working capital, Managerial Accounting

Financial decisions are depends on specific considerations the major being the cash flows, liquidity and cost. Short-term working capital decisions or financial decisions are different along with observing to frequency and quantum of cash flows. There are two notions of working capital:

(i) Gross Working Capital

(ii) Net Working Capital.

The main feature of the current asset is that they modify their form inside one operating cycle. Working capital requirement is affected by a variety of factors; the major among them is size and nature of business. There are different methods of computing working capital requirement. In several the base figures are acquired from financial statements.